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| Income Tax Formula: Income Tax = Taxable Income * Tax Rate | |||
Income Tax Definition An income tax calculator is a great online calculator that can give you a rough estimate of how much money you will have to pay in taxes at the end of the year. While it will not give you the exact number that you will get from the IRS, it will get you close enough that you will be able to plan to make the payment. This can help you budget all year long so that paying your taxes is quick and easy. Using The Calculator: It is not difficult to use the income tax calculator. You will need to enter all of the requested information in the fields. In order to get the correct amounts for the required fields, make sure you take into account the details below. The number that this financial calculator gives you is then the amount of money that you should expect to pay. So try this free calculator today! Thing To Take Into Account: The following things you will need to take into account in order to calculate your taxable income amount: 1. Your Total Wages This is just the sum of all of the money that you have made. If you work for a company, they will have to send you a W-2. If you are filling out the calculator before you get your W-2, you can just guess based on your hourly wage or your salary. This should get you close to the true amount. 2. Your Filing Status You need to let this online calculator know if you are filing as a single person or a married person. The amount of taxes that you have to pay will differ based on this. If you are married, your husband or wife will have to put their income in as well since it will all be considered together. 3. How Much Was Withheld Your company automatically withholds money for your taxes. This comes out of your paycheck before you even see the money. You need to put down how much was already taken so that you are not paying twice. 4. If You Are Self-Employed As a self-employed worker, you will need to pay more in taxes. This is because your company has not already taken the money out. This makes a huge difference in how much you have to pay, so make sure that you provide this information. 5. How Many Children You Have Each one of your children can be used as a deduction. This is to help people who have the added expenses of raising a family. You have probably paid more for your children in the last year than you will be saving on your taxes, but this can still save you hundreds of dollars that you would otherwise have to pay to the government. 6. All Business Deductions Things that you have used for your business can be deducted, especially if you are self-employed. This could mean travel expenses. If you have to drive for your job, you could use your car as a deduction. Those who work online are often able to deduct the price of the internet connection. 7. All Tax Credits You can sometimes get tax credits for things like efficient heating and cooling systems. You want to make sure that you report these so that the money that you were promised will be taken off of your taxes. 8. Any Side Wages If you have earned over six hundred dollars in wages on the side, you need to report that. This could be for anything at all. You do not need to report anything under six hundred dollars because this is not considered by the government to be a main income. Also, be sure to check out the FICA Tax Calculator and Tax Bracket Calculator. How to Calculate Income Tax Let's be honest - sometimes the best income tax calculator is the one that is easy to use and doesn't require us to even know what the income tax formula is in the first place! But if you want to know the exact formula for calculating income tax then please check out the "Formula" box above. |